So you’ve been audited by the Canada Revenue Agency (CRA) and received a reassessment on your income tax and/or GST/HST returns. You may have even been hit with gross negligence penalties. What do you do? How do you fight the reassessment? Is there any hope? Yes! You can protect your rights and file a Notice of Objection to settle your dispute with CRA.
A Notice of Objection is a formal dispute resolution process which allows you to make your case that the CRA auditor was wrong regarding your tax situation. The Notice of Objection is your best shot at telling your side of the story and getting some or all of the auditor’s adjustments reversed.
It is important to point out that the Notice of Objection is not a court-based process and you do not need a lawyer to represent you. However, this doesn’t mean you should go it alone – far from it! You absolutely should hire a tax specialist who knows how to best present your case in order to give you the greatest chance of a successful outcome.
Here are some key points to keep in mind about the Notice of Objection:
- Act quickly! In most cases, you only have 90 days from the date of the reassessment to file your Notice of Objection.
- What if I didn’t file within 90 days? Don’t lose hope! You have 1 year after the 90th day to request an extension of time to file your Notice of Objection. Your chances of getting your request granted is better the earlier you make it.
- What about CRA collections? (Part I) If you are objecting to an income tax issue, the good news is that the objection protects you from the CRA collector. However, as long as the debt remains unpaid – even while it is under objection – interest will continue to build.
- What about CRA collections? (Part II) However, unlike an income tax assessment, if you are objecting to an excise tax issue (i.e. GST/HST), the CRA collector will still want their money while you wait to have your objection resolved.
Let’s say you have been assessed a gross negligence penalty and want to have it removed. Some may ask if they should file a taxpayer relief application instead of a Notice of Objection. While the Taxpayer Relief Program does review requests to remove penalties, a Notice of Objection would be a much better choice. Why? A Notice of Objection is a formalized process in which the CRA must reverse the auditor’s position if your case is proven to be superior to that of the auditor. A taxpayer relief application is at the sole discretion of the employee reviewing your file. In the case of a gross negligence penalty, your chances of success are slim as you would have to prove “exceptional circumstances.” Also, filing a Notice of Objection stops collection action (see below) while a relief application does not.
I often get asked if filing a Notice of Objection is really worth the effort. I can answer that question with a resounding “YES”! A properly filed and represented Notice of Objection gives you an excellent chance to successfully resolve your dispute with CRA.
Don’t turn to just anyone to solve your tax problem. Call Tax Solutions Canada today for expert advice from their ex-CRA and tax specialists: 1-888-868-1400.